The Cigna Group · NYSE:CI
The Cigna — Cigna — Investor Day (November 2012)
115 slides from The Cigna's investor day presentation, Nov 16, 2012
Slide 1: Investor Day
INVESTOR DAY
Slide 2: Welcome
WELCOME Ted Detrick Vice President, Investor Relations 2
Slide 3: Cautionary Statement
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Slide 4: Financial Information and Non-GAAP Measures
FINANCIAL INFORMATION AND NON-GAAP MEASURES The following presentation includes management’s estimates of certain 2012 and 2013 financial information as of November 16, 2012. The Company uses certain financial measures which are not determined in accordance with generally accepted accounting princip
Slide 5: Agenda
AGENDA • Overview of Strategy and Growth Path Forward • Focus on the Customer • Physician Engagement • Impact of Leveraging Synergies • Financial Update • Q&A Panel • Investor Breakout Sessions with Management 5
Slide 6: Investor Day
INVESTOR DAY
Slide 7: Growth Strategy
GROWTH STRATEGY David Cordani President and Chief Executive Officer 7
Slide 8: Topics
TOPICS • The environment • Our strategy • Our results • Moving forward 8
Slide 9: Key Themes
KEY THEMES • Clear strategy to create value for our customers and clients • Diversified portfolio of businesses well positioned in growing markets • Differentiated capabilities leveraged across global operations • Strong track record of revenue and earnings growth • Attractive long-term outlook with
Slide 10: Dynamic Market Creating Opportunities for Growth
DYNAMIC MARKET CREATING OPPORTUNITIES FOR GROWTH External trends Customers • Aging of the population Taking on greater responsibility financially for health, wellness • Emergence of a global middle class and security decision making • Rise of chronic illness • Economic uncertainty and slow growth De
Slide 11: Our Strategic Approach
OUR STRATEGIC APPROACH OUR MISSION: Improve the health, well-being and sense of security of the people we serve. 2009 – Reposition portfolio Increase our financial Make “big choices” WHAT WE to businesses where flexibility by improving to pursue additional SAID WE we could achieve our cost position
Slide 12: Delivering Results Against Our Strategy
DELIVERING RESULTS AGAINST OUR STRATEGY OUR RESULTS: 2009–2012 • Effective portfolio management • 24% revenue CAGR in “emphasized” businesses • Greater than 2x membership growth in Go Deep markets Reposition portfolio • Progress on operating expense improvement • Delivering best-in-class medical cos
Slide 13: Capital Deployment Approach: 2009-2012
CAPITAL DEPLOYMENT APPROACH: 2009─2012 M&A and partnerships Reinvest in core businesses to accelerate growth • Increased investments in service and capabilities • Global Branding • More than 40 Collaborative Accountable Care programs Return capital to shareholders Joint • Repurchased $635M or 15.9 m
Slide 14: Measured by What Matters Most
MEASURED BY WHAT MATTERS MOST OUR RESULTS: 2009–2012 Retaining, 90%+ customer expanding and retention earning new rate relationships 17% increase in earnings per customer 15% increase in U.S. customers growth 14
Slide 15: Investor Day
INVESTOR DAY
Slide 16: Strong Track Record in a Challenging Market
STRONG TRACK RECORD IN A CHALLENGING MARKET CAGR $1.68B 600 bps $5.80 29% Improvement CI 17% CI 16% CI 14% Peers 4 % $29.2B Peers 5% Peers 12% 23% $1.09B $3.95 $18.4B Adjusted Income U.S. Health Care Revenue $B EPS* from Ops* $B Opex ratio 2009 Actual 2012 Guidance Managed Care Peers: Aetna, Health
Slide 17: Growing Shareholder Value
GROWING SHAREHOLDER VALUE 2012 YTD total shareholder returns(1) Stock price appreciation 25% Cigna +21% 3-year CAGR 20% Stock Price Change CI +13% 15% S&P +7% MCI +9% $50.87 10% S&P 500 +8% 5% $35.27 Managed 0% (2) 30-Dec 9-Mar 18-May 27-Jul 5-Oct 15-Nov Care Index -5% (-5%) -10% -15% 12/31/2009 11/
Slide 18: How We Win
HOW WE WIN CAPABILITIES ALIGNED POWERED BY TO MARKET NEEDS DIFFERENTIATED CAPABILITIES OUR CUSTOMER Customers want easy-to-use, Customer personalized value-based programs engagement LISTENING Employers expect integrated, Consultative tailored health and productivity programs distribution UNDERSTANDI
Slide 19: Three Differentiators
THREE DIFFERENTIATORS • We have three key points of sustainable differentiation for our business Customer engagement Consultative distribution Preferred physician partnerships 19
Slide 20: Moving Forward: Drivers for Growth
MOVING FORWARD: DRIVERS FOR GROWTH U.S. COMMERCIAL INTERNATIONAL SENIORS Go Deep in core markets and Go Deep in Korea; customer In-market and adjacent Continue disability insights; corporate expatriate service area expansion Preferred relationships with China; direct-to-consumer; Organizing physicia
Slide 21: Investor Day
INVESTOR DAY
Slide 22: Run Video
RUN VIDEO Consumer and physician engagement video (3:40) 22
Slide 23: Investor Day
INVESTOR DAY
Slide 24: Positioning Cigna to Drive Continued Shareholder Value
POSITIONING CIGNA TO DRIVE CONTINUED SHAREHOLDER VALUE • Cigna is continuing to deliver attractive results – Strong earnings and revenue track record • Disciplined execution against strategic growth plan – Diverse portfolio in growing markets with more efficient operations – Core differentiators gen
Slide 25: Investor Day
INVESTOR DAY
Slide 26: Focus on the Customer
FOCUS ON THE CUSTOMER Tyrrell Schmidt Jason Sadler Ann H. Asbaty Chief Marketing President, Chief Operating Officer, Global Individual Health, Officer, International Markets Life and Accident National Segment
Slide 27: Customer Insights
CUSTOMER INSIGHTS Tyrrell Schmidt Chief Marketing Officer, International Markets 27
Slide 28: Listening: How We Win
HOW WE WIN CAPABILITIES ALIGNED POWERED BY TO MARKET NEEDS DIFFERENTIATED OUR CAPABILITIES CUSTOMER Customers want easy-to-use, personalized value-based programs Customer LISTENING engagement UNDERSTANDING Employers expect integrated, tailored health and productivity Consultative HELPING programs th
Slide 29: Leveraging Insights: A Key Differentiator
INSIGHTS: A KEY DIFFERENTIATOR Customer Research and Feedback LEVERAGING LISTENING ACROSS EVERYTHING UNDERSTANDING WE DO: HELPING • Product MAKING IT EASY Data Mining, • Customer Service Test and Learn Analytics and Modeling CVM • Distribution • Clinical Outreach 29
Slide 30: Leading in Customer Value Management (CVM)
LEADING IN CUSTOMER VALUE MANAGEMENT (CVM) Our Proprietary Analytical Capability Global DATA • Geographic PATENT-PENDING • Market ANALYTICS/ • Consumer MODELING • Right product, Centers of • Medical / RX / solution Excellence + HRA • Prior sales + Propensity to Buy +/or Respond = • Right & • Custome
Slide 31: Video
VIDEO
Slide 32: Leading in Customer Value Management (CVM)
LEADING IN CUSTOMER VALUE MANAGEMENT (CVM) Our Proprietary Analytical Capability Global DATA • Geographic PATENT-PENDING • Market ANALYTICS/ • Consumer MODELING • Right product, Centers of • Medical / RX / solution Excellence + HRA • Prior sales + Propensity to Buy +/or Respond = • Right & • Custome
Slide 33: Investing in Technology and Tools
INVESTING IN TECHNOLOGY AND TOOLS A Customer Focus Health Plan Specialist Physician Pharmacist Other Alt Customer Care Cigna Trainer Health Coach Chiro Data and Proprietary Algorithms Engaging and driving the most effective outreach programs 33
Slide 34: Leading in Data Mining, Analytics, and Modeling
LEADING IN DATA MINING, ANALYTICS, AND MODELING Results in these benefits: Customers Clients Cigna • More personalized, relevant products • More relevant, targeted outreach • More aligned outcomes • Better connected with physicians • Tailored solutions for employees • More satisfied stakeholders • S
Slide 35: Engaging Our Individual Customers
ENGAGING OUR INDIVIDUAL CUSTOMERS Jason Sadler President, Global Individual Health, Life and Accident 35
Slide 36: Significant Competitive Advantage
SIGNIFICANT COMPETITIVE ADVANTAGE Internet Face to face THE CUSTOMER Global Footprint Customer Insights Outbound telemarketing Direct Response TV Direct mail Unique Distribution 36
Slide 37: Global Trends Favor Our Model
GLOBAL TRENDS FAVOR OUR MODEL • The empowered individual • Growing middle class • Aging population • Pressured health care systems 37
Slide 38: Global footprint: 30 countries, 14,000 employees
Netherlands Belgium Denmark, Norway, Sweden Ireland Germany U.K. Canada France Spain Italy China USA Turkey Portugal South Korea Switzerland Kuwait Bahrain Hong Kong Saudi Arabia Taiwan UAE India 30 countries/jurisdictions Oman Thailand 14,000 employees Singapore Indonesia 11 million policies in for
Slide 39: Solutions to Meet Our Customers' Needs
SOLUTIONS TO MEET OUR CUSTOMERS’ NEEDS Mr. Damaputra • Transportation worker • 40 years old • Wife and two young kids SOLUTION • As the sole earner in the family, he’s concerned about financial protection for his family • Comfortable buying over the phone • Supplemental health products • Hospital Ca
Slide 40: Solutions to Meet Our Customers' Needs
SOLUTIONS TO MEET OUR CUSTOMERS’ NEEDS Mr. Evans • Entrepreneur • 52 years old • Wife and one post-college son SOLUTION • Based in Switzerland • Has apartments in NYC and Taiwan • Frequent business traveler • Individual Private Medical products • Time-starved • Providing global health coverage • Glo
Slide 41: Making It Simple for Our Customers: Cigna New Zealand
MAKING IT SIMPLE FOR OUR CUSTOMERS: CIGNA NEW ZEALAND Internet Face to face THE CUSTOMER Outbound telemarketing Direct Response TV Direct mail 41
Slide 42: Making It Simple for Our Customers: Cigna New Zealand
MAKING IT SIMPLE FOR OUR CUSTOMERS: CIGNA NEW ZEALAND • Listening to our customers through extensive qualitative and quantitative market research – Feedback: make it easy for me • Developed life product tailored to their needs – A multi-channel distribution strategy – Convenient to buy across all ch
Slide 43: Supplemental Benefits: Direct Marketing Expertise
SUPPLEMENTAL BENEFITS: DIRECT MARKETING EXPERTISE AND KNOW-HOW LEVERAGED WORLDWIDE Data Analytics Customer Innovation Insights Unique Distribution Segmentation 43
Slide 44: Our Performance: Global Individual HL&A
OUR PERFORMANCE: GLOBAL INDIVIDUAL HL&A Revenue USD Billions $2.500 Persistency: Korea 2.000 CAGR 22% 1.500 Revenue 1.000 0.500 0 2009 2010 2011 2012 Est. Thousands FY07 FY08 FY09 FY10 FY11 AUG-12 11,000 Cigna Industry average CAGR 21% 9,000 Policies Cigna 66.0% 66.1% 68.3% 77.0% 82.2% 83.4% 7,000 I
Slide 45: Strategy for Growth
STRATEGY FOR GROWTH Go Deep Go Global Go Individual • Continue to focus and invest in • Expand into new • Expand U.S. Individual, leveraging core markets (Korea, China) geographies (Turkey, India) International experience • Further deepen affinity • Leverage capabilities • Capitalize on DTC expertis
Slide 46: Tailoring Solutions to Win in the Employer Market
TAILORING SOLUTIONS TO WIN IN THE EMPLOYER MARKET Ann H. Asbaty Chief Operating Officer, National Segment, Cigna 46
Slide 47: Leveraging Customer Insights and Tailoring Solutions
LEVERAGING CUSTOMER INSIGHTS AND TAILORING SOLUTIONS THROUGH CONSULTATIVE SELLING TO OUR EMPLOYER CLIENTS • Developed comprehensive, multi-channel campaign based on insights • Acquired more than 90,000 new customers, or 50% of the total customer opportunity 47
Slide 48: Leveraging Customer Insights and Tailoring Solutions
LEVERAGING CUSTOMER INSIGHTS AND TAILORING SOLUTIONS THROUGH CONSULTATIVE SELLING TO OUR EMPLOYER CLIENTS • 7% reduction in medical trend • 13% less absence for the Disability HealthCare Connect population • Durations overall are 2 days better than independent industry average 48
Slide 49: Leveraging Customer Insights and Tailoring Solutions
LEVERAGING CUSTOMER INSIGHTS AND TAILORING SOLUTIONS THROUGH CONSULTATIVE SELLING TO OUR EMPLOYER CLIENTS Austin Hardwoods 49
Slide 50: Great Performance Continues ... Keeping Our Commitment
GREAT PERFORMANCE CONTINUES … KEEPING OUR COMMITMENT U.S. COMMERCIAL GLOBAL HEALTH BENEFITS Revenue 7% (000s) Revenue 26% (000s) 16,000,000 CAGR CAGR 2,000,000 12,000,000 1,500,000 8,000,000 1,000,000 4,000,000 500,000 0 0 2009 2012 2009 2012 50
Slide 51: Cross Selling Creating Value
CROSS SELLING CREATING VALUE Insights Capabilities Solutions Value for Additional Clients Revenue 51
Slide 52: Meeting the Needs of the Globally Mobile
China India Meeting the needs of the Globally Mobile and key Local Nationals Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 52
Slide 53: Tailoring Solutions to Win in the Employer Market
TAILORING SOLUTIONS TO WIN IN THE EMPLOYER MARKET 53
Slide 54: Key Take-Aways
KEY TAKE-AWAYS • Global trends demand continuous innovation to meet evolving needs • Insights is a core differentiator that enables deep customer understanding • We have built core capabilities in talent, tools and infrastructure for our employer and individual businesses • We are winning in our cho
Slide 55: Q&A Panel
Q&A PANEL
Slide 56: Break
BREAK
Slide 57: Investor Day
INVESTOR DAY
Slide 58: The New Middle: Sharing Risk & Rewards
THE NEW MIDDLE: SHARING RISK & REWARDS An aligned physician engagement and customer-centric care delivery model Matt Manders Herb Fritch President, Regional and Operations President, HealthSpring
Slide 59: Cigna - Bridging to Better Quality and Value
CIGNA − BRIDGING TO BETTER QUALITY AND VALUE TODAY: MD FUTURE: FEE FOR INCENTIVES CARE JOINT MD COST DATA COORDINATORS SERVICE AND HEALTH MANAGEMENT VALUE MD QUALITY DATA MODEL GOVERNANCE PROGRAMS FINANCIAL AND MODEL PHYSICIAN MANAGER BUSINESS RISK MANAGEMENT Better Customer Better Lower Experience
Slide 60: Aligning Market Demand with Customer Benefits and Reimbursement
ALIGNING MARKET DEMAND WITH CUSTOMER BENEFITS AND REIMBURSEMENT DEMAND Clinical integration Education Information Customer Health Care engagement Navigation Alignment of incentives Professional Motivation engagement SUPPLY Value-based Value-based benefits reimbursement Confidential, unpublished prop
Slide 61: Working Better Together for Better Results
WORKING BETTER TOGETHER FOR BETTER RESULTS Physician/hospital group resources WORKING TOGETHER COLLABORATION FOR BETTER RESULTS EMBEDDED CARE COORDINATORS Individual Cigna • Patient-centered care Better engagement solutions • Personal care • Better health • Coordinated care • Better cost • Better sa
Slide 62: Cigna Collaborative Accountable Care Results
CIGNA COLLABORATIVE ACCOUNTABLE CARE RESULTS ER visit Medical Physician cost Quality ER visits cost trend referrals savings 4% 7% 5% 11% 12% lower per-patient lower ER visit improvement higher reduction in annual medical costs than in EBM utilization of avoidable cost trend than traditional care mea
Slide 63: Evolution of Physician Engagement
EVOLUTION OF PHYSICIAN ENGAGEMENT Transitioning from volume to quality for better care, more rewards, reduced cost Physician Independent Fee-for-Service Partnership for Organized Physician Association (FFS) Quality (P4Q) Delivery (POD) (IPA) VOLUME DRIVEN QUALITY INCENTIVE COST TARGET CAPITATION AND
Slide 64: Physician Engagement Impact on Growth and Results
PHYSICIAN ENGAGEMENT IMPACT ON GROWTH AND RESULTS • Sustains and accelerates growth IPA Membership 159,200 • Constant in times of change IPA Participating PCPs 2,300 • Better care, lower costs POD Membership 143,000 • Preferred relationships POD Participating PCPs 4,900 Reaches 75% of HealthSpring m
Slide 65: Welcome!
WELCOME! Dr. Sid King Dr. John E. Bertini, Jr. Dr. Jim Sams
Slide 66: Dr. Sid King, Sumner Medical Group
Dr. Sid King, Managing Partner, Sumner Medical Group 11 PCPs, 17 Specialists, 2,700+ HealthSpring customers Success Factors and Results Improved overall compliance across 37 quality measures by 160% over seven years. Physician support and input to design 100% 94% PCPs opt for HealthSpring exclusivit
Slide 67: Dr. John E. Bertini, Jr., Renaissance Physician Organization
Dr. John E. Bertini, Jr., Chairman, Renaissance Physician Organization 450+ PCPs, 1500+ Specialists, 38,700+ HealthSpring customers Goals: Working together to provide quality and innovative care within a changing health care landscape by focusing on what matters the most, our patients. 81% 52% 17% 1
Slide 68: Dr. Jim Sams, Piedmont Physicians Group
Dr. Jim Sams, Medical Director, Piedmont Physicians Group Five hospitals, 900+ physician PHO, 12,000+ employees Goals: improve employed population's total medical cost management trends; collaborate with physicians to differentiate themselves from their local and national hospital competitors Inform
Slide 69: Creating Value Across All Constituents
creating Customers value Health Care across all Professionals constituents Cigna shareholders Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 69
Slide 70: Cigna Physician Engagement Programs - 2006
CIGNA PHYSICIAN ENGAGEMENT PROGRAMS – 2006 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 70
Slide 71: Cigna Physician Engagement Programs - 2009
CIGNA PHYSICIAN ENGAGEMENT PROGRAMS – 2009 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 71
Slide 72: Cigna Physician Engagement Programs - 2012
CIGNA PHYSICIAN ENGAGEMENT PROGRAMS – 2012 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 72
Slide 73: Cigna Physician Engagement Programs - 2013
CIGNA PHYSICIAN ENGAGEMENT PROGRAMS – 2013 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 73
Slide 74: Q&A Panel
Q&A PANEL
Slide 75: Lunch
LUNCH
Slide 76: Investor Day
INVESTOR DAY
Slide 77: Impact of Leveraging Synergies
IMPACT OF LEVERAGING SYNERGIES David Cordani President and Chief Executive Officer 77
Slide 78: Leveraging Our Global Capabilities to Deliver Value Locally
LEVERAGING OUR GLOBAL CAPBILITIES TO DELIVER VALUE LOCALLY Key Themes • Clear strategy to create value for our customer and clients • Diversified portfolio of businesses well positioned in growing markets • Differentiated capabilities leveraged across global operations • Strong track record of reven
Slide 79: Leveraging Synergies
LEVERAGING SYNERGIES POWERED BY LEVERAGING THOSE TO DELIVER VALUE DIFFERENTIATED SYNERGIES GLOBALLY LOCALLY CAPABILITIES • Proven solutions and • U.S. Commercial Dental distribution capabilities from product re-designed to meet mature → growing global markets demand in Korea and Taiwan • Global dire
Slide 80: Expect to Deliver Sustained Growth Over the Longer Term
EXPECT TO DELIVER SUSTAINED GROWTH OVER THE LONGER TERM U.S. Individual/ U.S. Commercial Seniors International Retail/ Duals Potential mid-single high-single mid-teens meaningful Revenue to future Growth low teens opportunity • Increasing demand for Market Expansion • Growing middle class • Market d
Slide 81: Investor Day
INVESTOR DAY
Slide 82: Financial Update
FINANCIAL UPDATE Ralph Nicoletti Chief Financial Officer 82
Slide 83: Financial Update: Agenda
FINANCIAL UPDATE: AGENDA • Strong Track Record of Results • 2013 Outlook • Additional Value Creators • Attractive Long-term Outlook Clear Strategy, Customer Focus, Strong Execution = Shareholder Value 83
Slide 84: Cigna's 2009 Enterprise Strategy
Strong Track Record of Results CIGNA’s 2009 ENTERPRISE STRATEGY Reposition Create strategic and Pursue additional portfolio financial flexibility growth opportunity • Play to our Strengths • Operating Expense • Seniors • Focus • Medical Cost • Global • Balance Sheet Liabilities • Retail/Individual G
Slide 85: Strategy in Action (2009-2012)
Strong Track Record of Results STRATEGY IN ACTION (2009 - 2012) Reposition portfolio Create strategic and Pursue additional growth financial flexibility opportunities • Greater than 2x growth in • Operating expense • Emphasized seniors “GO DEEP” markets ratio improved through HealthSpring • ASO / Sp
Slide 86: Historical Revenue Growth
Strong Track Record of Results HISTORICAL REVENUE GROWTH 3 Year Consolidated Targeted Businesses CAGR Commercial Select, Middle Market and National Accounts Health Care Seniors 18% Medicare Advantage PDP 17% Health, Life & Accident International Global Health Benefits 24% Group Disability Disability
Slide 87: Strong Track Record in a Challenging Market
Strong Track Record of Results STRONG TRACK RECORD IN A CHALLENGING MARKET CAGR $1.68B $5.80 CI 17% CI 16% CI 14% Peers 4 % $29.2B Peers 5% Peers 12% $1.09B $3.95 $18.4B 2009 2012 2009 2012 2009 2012 Actual Guidance Actual Guidance Actual Guidance Adjusted Income Revenue $B EPS* from Ops* $B Managed
Slide 88: Strong Track Record in a Challenging Market
Strong Track Record of Results STRONG TRACK RECORD IN A CHALLENGING MARKET $1.68 CI 16% Peers 5% $1.09 2009 2012 Actual Guidance Adjusted Income from Ops* $B Managed Care Peers: Aetna, Health Net, Humana, UnitedHealth, WellPoint Outperforming Peers in all Key Metrics 88
Slide 89: 2012 Outlook
Strong Track Record of Results 2012 OUTLOOK ($ in millions, except per share amounts) 2012 Estimated Earnings* Outlook Y/Y Growth Health Care $1,290–$1,320 +32% International 280–290 +28% Group Disability & Life 265–275 -4% Ongoing Businesses $1,835–$1,885 +25% Consolidated $1,655–$1,705 +23% Earnin
Slide 90: 2013 Outlook - Macro Assumptions
2013 Outlook 2013 OUTLOOK – MACRO ASSUMPTIONS • Global economic environment continues to be challenging • Continued low interest rate levels • Continued strong growth of the middle class in Asia • GDP growth of 7% in ‘Developing Asia’ • In the U.S.: – Unemployment levels in the high-single digits –
Slide 91: Well Positioned to Deliver Compelling Returns for Shareholders
2013 Outlook WELL POSITIONED TO DELIVER COMPELLING RETURNS FOR SHAREHOLDERS Attractive 2013 Outlook Effective Global Capital Capabilities Long-term Deployment Outlook: 10-13% EPS* Growth Strong Diversified Track Portfolio Record Highly Confident in our Ability to Achieve our Target 91
Slide 92: Longer-Term EPS Outlook - Components of Growth
2013 Outlook LONGER-TERM EPS* OUTLOOK – COMPONENTS OF GROWTH 3 Year CAGR 3 - 5 Year (1) 2009-2012 EPS* Outlook Earnings* Contribution 9.1% 6 - 10% Capital Deployment 4.6% 3 - 5% 13.7% 10 - 13% Clear Strategy, Customer Focus, Strong Execution = Shareholder Value 92
Slide 93: 2013 Outlook
2013 Outlook 2013 OUTLOOK ($ in millions, except per share amounts) Enterprise 2013 Y/Y Outlook Outlook Y/Y Outlook As Adjusted (1) Revenues $31,500 - $32,500 8% - 11% 8% - 11% Earnings* $1,685 – $1,815 2% - 7% 4% – 9% Earnings Per Share* (excluding $5.80 – $6.25 2% - 6% 4% – 8% capital deployment)
Slide 94: Drivers of 2013 Revenue Growth
2013 Outlook DRIVERS OF 2013 REVENUE GROWTH 2013 Consolidated Targeted Businesses Outlook Commercial Mid to high Select, Middle Market and single digits National Accounts Health Care Seniors Medicare Advantage Mid to PDP upper teens (Includes full year of HealthSpring) 8–11% Health, Life & Accident
Slide 95: 2013 Enterprise Earnings Outlook
2013 Outlook 2013 ENTERPRISE EARNINGS* OUTLOOK (after-tax, $ in millions) 2012 Outlook $1,655-$1,705 2012 Prior Year Claim Development (61) 2012 VADBe charges 27 2012 Outlook (Adjusted) $1,621-$1,671 Earnings* Growth 2013 Estimate $1,685-$1,815 4-9% Key Drivers: + Growth – Primarily Health Care and
Slide 96: Effective Operating Expense Improvement
2013 Outlook EFFECTIVE OPERATING EXPENSE IMPROVEMENT Health Care Operating Expense ratio Total OpEx Ratio 2009-2012 30.0% 29.0% 28.0% 29.4% • Business mix – HealthSpring 27.2% 27.0% 26.5% acquisition worth ~ 300bps 26.0% 26.7% 25.0% • Targeted efficiency programs 24.0% 23.0% • Continued Strategic In
Slide 97: 2013 Parent Company Cash
2013 Outlook 2013 PARENT COMPANY CASH Full-Year 2013 $ millions Projection BEGINNING PARENT COMPANY CASH $700 Subsidiary Dividends $1,500 Net Pension Contributions ($170) Other Sources and Uses ($230) FULL-YEAR PARENT COMPANY CASH AVAILABILITY $1,800 Target to Maintain at Parent ($400 - 500) Availab
Slide 98: Recent Capital Deployment - 2010-2012
2013 Outlook RECENT CAPITAL DEPLOYMENT – 2010-2012 Other VADBe Pension Share Repurchase Strategic M&A Focused on Strategic Acquisitions to Enable Long-term Growth 98
Slide 99: Strategic M&A
2013 Outlook STRATEGIC M&A Pursue additional growth opportunities India • Emphasized seniors through HealthSpring • Individual and retail capabilities • Expanded global capabilities and Turkey markets Strategic M&A: 2010–2012 99
Slide 100: Cigna Seniors Business: Long-Term Growth and Value Creation
2013 Outlook CIGNA SENIORS BUSINESS: LONG-TERM GROWTH AND VALUE CREATION • Business is running strong and integration is on track • Demographic growth / differentiated physician engagement model Core Business Synergies Future Mid - high single Low - mid single Low double digits revenue digits revenu
Slide 101: 2013 Outlook - Summary
2013 Outlook 2013 OUTLOOK – SUMMARY • Strong Revenue growth • Attractive Earnings* growth – Primarily organic driven – Continued operating expense efficiency improvements – Continued Strategic Investments for future Growth • Additional opportunity for EPS* growth through Capital Deployment Continued
Slide 102: Value Creators
Additional Value Creators VALUE CREATORS • Enhanced Capital Efficiency • Run-off Reinsurance • PBM Optionality Increased Flexibility for Returns to Shareholders / Investments for Growth 102
Slide 103: Improved Capital Efficiency
Additional Value Creators IMPROVED CAPITAL EFFICIENCY • Strong Operating Performance creates opportunities for Capital Efficiency • Enhanced Global Legal Entity Structure • $500M - $750M of additional capital to be generated over several years for deployment priorities Increases Capital Available fo
Slide 104: Run-Off Reinsurance
Additional Value Creators RUN-OFF REINSURANCE VADBe Policies (000s) ~ 75% Decline 2,000 • In run-off since 2000 in Policies 1,500 Since 2001 • Focused risk management / Dedicated Structure and management team 1,000 • Well capitalized to withstand significant market downturns 500 • Reduced risk / inc
Slide 105: PBM: High Performing Business Delivering Good Value
Additional Value Creators PBM: HIGH PERFORMING BUSINESS DELIVERING GOOD VALUE TO CUSTOMERS • Effective and important part of our Integrated value proposition • PBM is a strong and high performing asset • Incremental volume from HealthSpring creates Value • Evaluating a Variety of Options with Specif
Slide 106: Diversified Longer-Term Growth Opportunities
Attractive Long-term Outlook DIVERSIFIED LONGER-TERM GROWTH OPPORTUNITIES Growth Opportunities / Margin* Profile U.S. Commercial U.S. Individual / Retail / (Health Care / Group) Seniors International Duals Potential Mid- High Mid- Meaningful Mid- Revenue Single single to teens Future single Growth L
Slide 107: Cigna's Longer-Term EPS Outlook - Components of Growth
Attractive Long-term Outlook CIGNA’S LONGER-TERM EPS* OUTLOOK – COMPONENTS OF GROWTH 3 Year CAGR 3 - 5 Year 2010-2012 EPS* Outlook Earnings* Contribution 9.1% 6 - 10% Capital Deployment 4.6% 3 - 5% 13.7% 10 - 13% Clear Strategy, Customer Focus, Strong Execution = Shareholder Value 107
Slide 108: Well Positioned to Deliver Compelling Returns for Shareholders
Attractive Long-term Outlook WELL POSITIONED TO DELIVER COMPELLING RETURNS FOR SHAREHOLDERS Attractive 2013 Outlook Effective Global Capital Capabilities Long-term Deployment Outlook: 10-13% EPS* Growth Strong Diversified Track Portfolio Record Highly Confident in our Ability to Achieve our Target 1
Slide 109: Q&A Panel
Q&A Panel David Cordani President and Chief Executive Officer Ralph Nicoletti Chief Financial Officer 109
Slide 110: Closing Remarks
CLOSING REMARKS David Cordani President and Chief Executive Officer 110
Slide 111: Notes
NOTES •Cigna measures the financial results of its segments using segment earnings (loss), which is defined as shareholders’ net income (loss) before net realized investment results. Adjusted income (loss) from operations is defined as segment earnings (loss) excluding special items and the results
Slide 112: Reconciliation of Non-GAAP to GAAP Financial Measures
Reconciliation of Non-GAAP to GAAP Financial Measures (Dollars in millions, except per share amounts) U.S. Health Group Total Diluted EPS Care International Disability & Life Ongoing Ops. Consolidated Consolidated Year Ended December 31, 2009 Adjusted income from operations $ 729 172 279 1,180 1,087
Slide 113: Investor Day
INVESTOR DAY
Slide 114: Guidance Sheet
Cigna Investor Day GUIDANCE SHEET The following statements represent management’s estimate of certain 2012 and 2013 financial information as of November 16, 2012. Actual results may differ materially from the Company’s estimates depending on a number of factors, and investors are urged to read the C
Slide 115: Notes: Cautionary Statement
Notes: 1. Cigna measures the financial results of its segments using segment earnings (loss), which is defined as shareholders’ net income (loss) before net realized investment results. Adjusted income (loss) from operations is defined as segment earnings (loss) excluding special items and the resul